The Problem with the “Loonies”, Part One

The Problem with the “Loonies”, Part One
Profile photo of Caleb McMillan

Canadian “Greenbackers” are those people who believe the government should force interest-free loans through the nation’s central bank, the Bank of Canada. Presumably, this would entail something similar to what happened in the Great Depression, where governments essentially forced private banks to end the “credit famine.”

“Greenbackers” is an American term so I prefer the term, “Loonies” since that’s the name of the Canadian dollar and because these ideas are sheer lunacy.

The Loonies don’t like gold. They prefer government-issued tokens. They think these tokens represent value but that’s a whole other argument. What’s important here is the actual history of paper money. Back when people actually held precious metals as savings, it was common for governments to demand taxation in these precious metals instead of the paper money currencies widely circulating.

Eventually, British North Americans were left with nothing but paper tokens. Today, we call ourselves Canadians and mostly rely on debit and credit.

The Loonies exalt these digital numbers to the highest economic value and claim a moral right to steal them from people.

The Loonies speak of the “great things” the Canadian government financed “interest-free.” They talk about the St, Lawrence Seaway, the Trans Canada Highway, Air Canada, the CBC and “indispensables” like hospitals, schools, and universities.

But public works mean taxes, even if the costs are hidden through inflation. The Loonies must accept the broken window fallacy if they there to be taken seriously. Stories like the broken window fallacy are true in archetypal, Darwinian ways that are different from the natural sciences.

Dostoevsky said something true, Shakespeare tapped into something universal, and in similar fashion, the story of a baker having to replace his window because a vandal broke it demonstrates a validity in accordance with our understanding of human action.

When a vandal breaks a baker’s window it must be replaced by the business owner. Nothing new has been added to the economy. The wealth of the baker is spent on restoring what already existed.

“That which is seen and that which is not seen” is a truth that is as factual as the lunar eclipse.

The Loonies claim Canada helped pay for World War 2 using their special interest-free method. But World War 2 was not a good time for anybody.

Millions of men were taken out of the work force, everyone else was taxed, inflation persisted, the government instituted wage and price controls, while labour and goods were rationed as if the Canadian economy was some kind of Soviet dictatorship.

But what about this “interest-free” loan claim?

Stay tuned for tomorrow’s blog post for that answer.

Profile photo of Caleb McMillan

Caleb McMillan is a writer that lives in Vancouver, British Columbia.

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